India and Peru established bilateral diplomatic relations in March 1963. These have traditionally been cordial and since the 1990s, have focused on increasing business, economic and trade ties. Both countries cooperate on multiple multilateral issues. For Peru, India is significant due to APEC membership and its interest in the Asian region. Moreover, India is perceived as a technologically advanced, democratic and developing country. Peru is a member of G-77 and NAM.
One of the most talked about aspects of Indian-Latin American diplomacy are the free trade talks between Peru and India. This would mark the first time that India would negotiate a comprehensive free trade agreement (FTA) with a Latin American country. Both countries set up a Joint Study Group (JSG) in January 2015 in order to conduct a feasibility study. Concluded in October 2016, it gave the go-ahead for discussions on trade across goods, services and investments.
From the Peruvian perspective, an FTA with India would consolidate its economic position globally by contributing to its South-South trade initiatives, which include participation in the Trans-Pacific Partnership (TPP) and interest in the Regional Comprehensive Economic Partnership (RCEP). In 2012, Peru entered the “billion-dollar club” in annual trade with India, alongside Mexico, Colombia, Argentina, Chile, Venezuela and Brazil.
In the Latin America and Caribbean (LAC) region, Peru ranks 3rd amongst export destinations for India. Bilateral trade between both countries increased from USD 1.77 billion in 2016-17 to USD 3.13 billion in 2017-18. India exports cars, motor vehicles, iron and steel products, fabrics and cotton yarn and imports ores, bulk minerals, zinc, crude oil, fertilisers and gold.
According to the Federation of Indian Export Organisations (FIEO), “the FTA would help boost our exports. South American markets such as Peru hold huge export potential for India. The only issue is logistics cost, which the FTA should look into to facilitate shipments.” A free trade deal is expected to increase Peruvian exports to India by 12%. Peru’s abundance in natural resources and India’s technological capability and heavy industries are sources of mutual interest for both countries respectively.
The first round of trade negotiations was concluded successfully in August 2017, addressing issues like tariffs, technical trade barriers, rules of origin, sanitary and phytosanitary measures, movement of people, services, customs, investment, trade facilitation, cooperation, institutional matters, trade remedies, dispute settlement etc. Both countries are holding the fourth round of negotiations in Peru in March 2019, to build on the previous round of talks.
Both countries are aiming to liberalise trade norms and deepen investment, to expand their respective trade baskets, especially across agricultural products and earth minerals. With the growing uncertainties in traditional markets like the US, Europe etc., India is keen to enhance commercial engagements with South America, Africa and Central Asia.
India Outbound
February 11, 2019
source https://indiaoutbound.org/indian-peruvian-negotiations-over-fta/
No comments:
Post a Comment